Taiwan central bank cuts GDP outlook, stands pat on rates

Published Thu, Dec 14, 2023 · 05:14 PM

Taiwan’s central bank cut its 2023 economic growth forecast for the export-reliant economy due to sluggish global demand, but as expected, it kept rates on hold on Thursday (Dec 14) as inflationary pressures ease.

The central bank, in a unanimous decision, left the rate at 1.875 per cent, where it has sat since March, extending a pause in its current round of tightening which began in March of last year. It raised rates five times by a total of 75 basis points to rein in price pressures.

In a Reuters poll, 28 out of 29 economists had predicted the central bank would stand pat.

The move follows the US Federal Reserve’s decision to keep interest rates unchanged on Wednesday and indicated that its tightening cycle is likely over, flagging rate cuts next year.

Taiwan’s central bank again cut its 2023 estimate for economic growth to 1.4 per cent from a forecast of 1.46 per cent in September, but predicted a rebound in 2024 with growth of 3.12 per cent, compared with a previous forecast of 3.08 per cent.

The central bank also slightly raised its consumer price index (CPI) forecast for this year to 2.46 per cent from a previous prediction of 2.22 per cent, but said it saw it falling to below 2 per cent next year. REUTERS